People are getting desperate to sell

Try this:
$200k returning 10% in six months = $20k.
Over 12 months at this same rate of return you would get $40k
If you leverage it or gear it to 50% this involves borrowing another $200k.
Now you have $400k invested returning 10% for 6 months = $40k and over 12 months you will get $80k.
Interest bill for the $200k of borrowed funds at 6.5% is $13k.

Hope this helps..

kp

Sqirming Realeastates.
Two yrs ago l had to wait a week 2 or 3 times to get shown a property . No racing out to ask if they could help- [sell you something ] or dirve you around all day . You looked in a window & the arrogance , they wouldn’t even bother returning calls [ NSW Sth Coast at the time ] . Considering the real nature of the beast , glorified car salesman , this really made me sick . Your a customer that may spend 100’s of thousands of dollars on something they are only selling , they don’t own it all they work for the customers . l said to people then don’t you worry about that , another year or two and they’ll be back where they should be .
l suppose there’s good and bad in that and l know it sounds negative but l for one am bloody glad to see a bit of customer respect back in the game even if it is just grovelling . l think getting things back to normal is allot healthier all round and predictable unless you were one of the lucky ones .
Cheers
Mkc.

Are these eastern markets falling all over we have been looking at a new apartment in Brisbane as a base in December 2004 it was $630000 for a 3 bed on the edge of the CBD it was only in new stages at this point.
Last week we where contacted by the development firm as building has just started and foundations laid they asked if we where still interested so i asked again for the figures and availability none of the 6 3bed apartments had been sold but they all had gone up in price ours was now $810000, a rise of $180000 in a year but they had not sold one apartment when i pulled them up on this they said the growth rate for Brisbane CBD was around 17.5% and this reflected there price rise ?.
Are these developers CRAZY or is it just me, who calls an interested investor 1 year on and says would you like to buy the apartment you wanted,by the way we have not sold any 3bed apartments but the price has gone up 28% i just had to laugh.

But am i out of step is this right for Brisbane ?.

Thanks mkc,

I thought the Brisbane CBD was overpriced in December 2004 compared to other CBD’s they are going to phone in the next couple of days , I am thinking of putting in an offer 10% below what they priced in Dec 2004 instead of 18% above.
I will leave it an open offer then they can always come back to me and i just have to hope that i have not overplayed my hand, its following the advice of most people on the forum no matter how much you want the property Business is Business.

Thanks.

Seeing the same.

Agents use these people to sell other properties. Show you three over priced and the people on the money look cheap. You have to know what they are selling for as what people are asking has lost its relevance.

Hey Clones , nice strategy .

Hey JVT , glad l’m not in WA then , still moving fast there , that about to stop point was a scary time over here you just had no idea what things would do , still don’t in my view .
Feel sorry for first home buyers the most that might have payed huge and over reached in a panic .

Cheers
Mkc

The old trading adage – let the profits run and stop your losses. Would you have sold Nasdaq at 3500 when it was on its way up to 5000?

WA is still relatively affordable. Until I get to a point where I can sell 2 WA properties to buy one house in Syd, then its a sign to me that we’re sort of getting to some kind of equilibrium. Why would I pay $450K+ for a 30-40 year old 2bed room unit in Syd when I can pay $350K for a 4×2 in Mandurah with better yields, depreciation benefits and potential capital growth?

If you have a look at median wages, all the capital cities don’t vary by much – $4K max but the disproportionate house prices??

BTW Shwing, don’t be so quick to come back to Syd. You’ll need very deep pockets to buy IPs over here still. Vendors aren’t discounting their properties by 10-20% so not many bargains around. We’re in for the long haul before the next cycle. Just keep picking off the undervalued suburbs cos its that much harder in this cycle to just buy ordinary and ride the wave.

Yup, I could be wrong about Perth about to slow, but the point is we can only offer opinions coz we don’t really know what will happen.

Interest rates will go up, not sure when but they will. With so many investors, flippers, FHB, paying to the MAX of their landing capacity (and sometimes more) just to secure property here the slightest rise will place pressure on high debt property owners.

The Sydney market being referred to in 2001 and continuing on for a further 2 years was in the time of lowering interest rates. Therefore the buying market was bouyed with confidence. Interest rates have bottomed out and seem to sure to go up as national debt levels escalate.

All I am saying is that you wouldn’t buy property in Perth right now. Take the $225,000 villa’s I referred to earlier. Say spend $5k to tidy up, buying costs of approx $10k, holding costs for 12 months (assume rented at $180 pw and managed) $5k, incidentals $2k – the property has to appreciate by $22k or 10% just to break even. Now if the market softens within 6-12 months, then no profit to be had, and possibly a long hold to make money, even till the next gropwth cycle which could take 3-5 years…..going on history.

Why wouldn’t you wait until the market softens (relying on interest rates) to buy? Right now the agents are unbelievably arrogant, their is way to much hype..its just mad. If yoy have IP’s in Perth…sell I reckon and make a killing! Then cash will be king for you.

JES

sorry
ignore last post
more bad news
“A new international housing affordability survey has rated most of Australia’s capital cities as severely unaffordable.

The survey compared house prices with the average annual income in Australia, Canada, New Zealand, Ireland, the UK and the United States.

Co-author of the report, Hugh Pavletich of New Zealand, says Sydney is the most unaffordable in Australia with residents needing to spend eight-and-a-half times their annual average income to buy a home.

In a surprise result, Hobart came in as Australia’s second most unaffordable city for housing, with residents needing six times their annual salary.

Mr Pavletich says it is an acceptable and unnecessary situation.

“We do have examples throughout the world and particularly through North America where cities are currently affordable, where in other words people do not have to pay any more than three times their annual income to buy a home, instead of the six and eight times – that is the case in Australia and New Zealand,” he said”
source abc

will someone stop these people

how the hell are we going to make any money

average salary $50k…thats should make properties $150k…impossible